12. SEGMENT INFORMATION

As defined in FASB ASC 280, Segment Reporting (ASC 280), an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision makers to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. We evaluate performance based on pretax net income relative to resources used, and allocate resources based on these results. The accounting policies applicable to our segments are those that apply to our preparation of the accompanying unaudited Consolidated Financial Statements. Based on these criteria, we have identified three segments: WSFS Bank, Cash Connect^®, and Wealth Management.

The WSFS Bank segment provides financial products to commercial and retail customers. Retail and Commercial Banking, Commercial Real Estate Lending and other banking business units are operating departments of WSFS Bank. These departments share the same regulator, the same market, many of the same customers and provide similar products and services through the general infrastructure of the Bank. Accordingly, these departments are not considered discrete segments and are appropriately aggregated within the WSFS Bank segment in accordance with ASC 280.

Cash Connect^® provides ATM vault cash and smart safe and cash logistics services through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry. Cash Connect^® services non-bank and WSFS-branded ATMs and retail safes nationwide. The balance sheet category “Cash in non-owned ATMs” includes cash from which fee income is earned through bailment arrangements with customers of Cash Connect^®.

The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses. WSFS Wealth Investments provides financial advisory services along with insurance and brokerage products. Cypress, a registered investment adviser, is a fee-only wealth management firm managing a “balanced” investment style portfolio focused on preservation of capital and generating current income. WSFS (West) Capital Management, a registered investment adviser, is a fee-only wealth management firm operating under a multi-family office philosophy to provide customized solutions to institutions and high-net-worth individuals. The trust division of WSFS Bank (doing business as Christiana Trust) provides personal trust and fiduciary services, as well as, trustee, agency, bankruptcy administration, custodial and commercial domicile services to corporate and institutional clients. Powdermill is a multi-family office specializing in providing independent solutions to high-net-worth individuals, families and corporate executives through a coordinated, centralized approach. WSFS Wealth Client Management serves high-net-worth clients by delivering credit and deposit products and partnering with other Wealth Management units to provide comprehensive solutions to clients.

The following tables show segment results for the three and nine months ended September 30, 2018 and 2017:



	Three Months Ended September 30, 2018									Three Months Ended September 30, 2017
(Dollars in thousands)	WSFS Bank		Cash Connect^®		Wealth Management			Total		WSFS Bank		Cash Connect^®		Wealth Management			Total
Statements of Income
External customer revenues:
Interest income	$	72,836	$	—	$	2,579		$	75,415	$	62,748	$	—	$	2,262		$	65,010
Noninterest income	18,524		13,026		10,351			41,901		12,102		11,212		9,127			32,441
Total external customer revenues	91,360		13,026		12,930			117,316		74,850		11,212		11,389			97,451
Inter-segment revenues:
Interest income	4,002		—		3,020			7,022		2,537		—		2,235			4,772
Noninterest income	2,122		200		36			2,358		1,721		213		37			1,971
Total inter-segment revenues	6,124		200		3,056			9,380		4,258		213		2,272			6,743
Total revenue	97,484		13,226		15,986			126,696		79,108		11,425		13,661			104,194
External customer expenses:
Interest expense	11,461		—		857			12,318		8,542		—		339			8,881
Noninterest expenses	44,922		8,133		(601		)	52,454		39,546		7,048		7,569			54,163
Provision for loan losses	3,776		—		(60		)	3,716		3,065		—		(169		)	2,896
Total external customer expenses	60,159		8,133		196			68,488		51,153		7,048		7,739			65,940
Inter-segment expenses:
Interest expense	3,020		2,885		1,117			7,022		2,235		1,856		681			4,772
Noninterest expenses	236		627		1,495			2,358		250		556		1,165			1,971
Total inter-segment expenses	3,256		3,512		2,612			9,380		2,485		2,412		1,846			6,743
Total expenses	63,415		11,645		2,808			77,868		53,638		9,460		9,585			72,683
Income before taxes	$	34,069	$	1,581	$	13,178		$	48,828	$	25,470	$	1,965	$	4,076		$	31,511
Income tax provision								9,893									10,942
Consolidated net income								$	38,935								$	20,569



	Nine Months Ended September 30, 2018								Nine Months Ended September 30, 2017
(Dollars in thousands)	WSFS Bank		Cash Connect^®		Wealth Management		Total		WSFS Bank		Cash Connect^®		Wealth Management		Total
Statements of Income
External customer revenues:
Interest income	$	207,725	$	—	$	7,454	$	215,179	$	181,670	$	—	$	6,500	$	188,170
Noninterest income	57,175		36,707		30,473		124,355		34,318		31,403		26,488		92,209
Total external customer revenues	264,900		36,707		37,927		339,534		215,988		31,403		32,988		280,379
Inter-segment revenues:
Interest income	10,535		—		8,053		18,588		6,780		—		6,735		13,515
Noninterest income	6,449		581		107		7,137		5,791		611		113		6,515
Total inter-segment revenues	16,984		581		8,160		25,725		12,571		611		6,848		20,030
Total revenue	281,884		37,288		46,087		365,259		228,559		32,014		39,836		300,409
External customer expenses:
Interest expense	31,563		—		1,816		33,379		23,744		—		880		24,624
Noninterest expenses	126,862		23,357		13,478		163,697		117,288		19,774		21,334		158,396
Provision for loan losses	9,721		—		143		9,864		6,097		—		804		6,901
Total external customer expenses	168,146		23,357		15,437		206,940		147,129		19,774		23,018		189,921
Inter-segment expenses:
Interest expense	8,053		7,460		3,075		18,588		6,735		4,843		1,937		13,515
Noninterest expenses	688		1,936		4,513		7,137		724		1,944		3,847		6,515
Total inter-segment expenses	8,741		9,396		7,588		25,725		7,459		6,787		5,784		20,030
Total expenses	176,887		32,753		23,025		232,665		154,588		26,561		28,802		209,951
Income before taxes	$	104,997	$	4,535	$	23,062	$	132,594	$	73,971	$	5,453	$	11,034	$	90,458
Income tax provision							27,569								30,382
Consolidated net income							$	105,025							$	60,076

The following table shows significant components of segment net assets as of September 30, 2018 and December 31, 2017:



	September 30, 2018								December 31, 2017
(Dollars in thousands)	WSFS Bank		Cash Connect^®		Wealth Management		Total		WSFS Bank		Cash Connect^®		Wealth Management		Total
Statements of Financial Condition
Cash and cash equivalents	$	132,857	$	564,915	$	13,600	$	711,372	$	104,530	$	611,385	$	7,951	$	723,866
Goodwill	145,808		—		20,199		166,007		145,808		—		20,199		166,007
Other segment assets	6,053,095		8,098		221,270		6,282,463		5,882,910		6,078		220,679		6,109,667
Total segment assets	$	6,331,760	$	573,013	$	255,069	$	7,159,842	$	6,133,248	$	617,463	$	248,829	$	6,999,540
Capital expenditures	$	4,252	$	340	$	316	$	4,908	$	8,197	$	184	$	613	$	8,994